Free Syrian Army fighters in Aleppo … many in the conflict are using the drug to keep going. Photograph: AFP/Getty Images

As Syria sinks ever deeper into civil war, evidence is starting to emerge that a brutal and bloody conflict that has left more than 100,000 people dead and displaced as many as two million is now also being fuelled by both the export and consumption of rapidly increasing quantities of illegal drugs.

Separate investigations by the news agency Reuters and Time magazine have found that the growing trade in Syrian-made Captagon – an amphetamine widely consumed in the Middle East but almost unknown elsewhere – generated revenues of millions of dollars inside the country last year, some of which was almost certainly used to fund weapons, while combatants on both sides are reportedly turning to the stimulant to help them keep fighting.

According to the UN Office on Drugs and Crime, Syria has long been a transit point for drugs coming from Europe, Turkey and Lebanon and destined for the wealthy Gulf states. But the breakdown of law and order, collapse of the country's infrastructure and proliferation of armed groups have now turned it into a major producer, Reuters says. Production in Lebanon's Bekaa valley – a traditional centre for the drug – fell 90% last year from 2011, with the decline largely attributed to production inside Syria.

Neither investigation found conclusive evidence that the warring sides were using profits from the drug directly to buy weapons, but both quoted experts and officials as saying this was highly likely. A former US Treasury official, Matthew Levitt, pointed out that the Iranian-funded, Lebanon-based militant group Hezbollah, which is robustly backing Syria's Assad regime, "has a long history of dabbling in the drug trade to help with funding".

Col Ghassan Chamseddine, head of the drug enforcement unit in Lebanon, where more than 12m Captagon tablets were seized last year, said that most of the illicit pills are hidden in trucks passing from Syria to Lebanese ports, from where they are shipped to the Gulf. He suspected proceeds from the drug trade were being used "at least partly" to fund anti–Assad rebels inside Syria, he told Time.

Captagon, the trademark name for the synthetic stimulant fenethylline, was first produced in the 1960s to treat hyperactivity, narcolepsy and depression, but was banned in most countries by the 1980s as too addictive. It remains hugely popular in the Middle East; Saudi Arabia alone seizes some 55m tablets a year, perhaps 10% of the total thought to be smuggled into the kingdom.

The drug is cheap and simple to produce, using ingredients that are easy and often legal to obtain, yet sells for up to $20 a tablet. A Lebanese psychiatrist, Ramzi Haddad, said that Captagon had "the typical effects of a stimulant", producing "a kind of euphoria. You're talkative, you don't sleep, you don't eat, you're energetic."

Those effects explain why fighters from most of the warring parties in the conflict – with the exception of al Qaida-linked groups, which mostly hold to a strict interpretation of Islamic law – are now said to be making extensive use of Captagon, often on night missions or during particularly gruelling battles. But doctors and psychiatrists say use of the drug is also becoming widespread among Syria's increasingly desperate civilian population.